The accuracy of upscaling procedures can be improved by using non-uniform grid cells at the coarse scale level. Several researchers have investigated objective methods of selecting the optimal coarse grid configuration for a particular fine grid model 1-2. However, all of these works neglect the effect of fluid force balances and always assumed the model to be in viscous dominated flow. This paper describes a new optimal grid-coarsening scheme for two-phase flow in porous media based on the quantitative use of fine-scale simulation data. The main idea of this approach is to use fine-grid fluctuating moments to guide the choice of the coarse grid structure. These quantities are derived from the volume average saturation equation for different fluid force balances i.e. viscous, gravity and capillary. It is shown that this approach results in a more accurate prediction of quantities such as total oil recovery and fluid production ratio in coarse grid models.


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